CIL's modified procurement terms reduces equipment value

Coal India (CIL) has modified its terms and conditions for heavy mining equipment procurement to encourage competition and help reduce price compared to 2008 rates.

CIL signed a contract worth Rs 590 crore with US-based global mining equipment maker P&H for two 42 cubic metres shovels along with 17 years maintainence and repair contract yesterday.

"In this contract we have been able to procure two shovels at a price which is 7% lower than similar capacity shovels contract signed with Bucyrus in 2008," CIL Chairman Partha S Bhattacharyya said.

He said previously CIL followed a term in which penalties could surpass the contract value that was not accepted by P&H earlier.

"We have modified the terms to bring greater competition in procurement," he added.

These shovels would be deployed in South-eastern Coalfields to maintain the productivity levels.

"Unless, we deploy such heavy duty equipment, there will be decline in productivity. Such equipment will help us in stopping outsourcing overburden removal," Bhattacharyya said.

For evacuation of the coal mined from these shovels, 16 new dumpers valued at Rs 256 crore had also been placed.

The shovels are scheduled be delivered within next 14 months, P&H Joy Mining Equipment India Operations Manager Aniruddha Bandopadhyay said.

Meanwhile, CIL had ordered total equipment worth Rs 1,500 crore during the year. However, it does not include orders placed by the subsidiaries, Bhattacharyya said.